Integrative Growth

Integrative growth improves sales and profitability through vertical, horizontal, composite, and concentric integration. This includes acquisitions and mergers. Types of integrative growth methods:

Vertical integration

Vertical integration combines forward or backward supply chains, reducing costs and facilitating product development. For example, a footwear company merging with a leather tannery.

Horizontal integration

A horizontal integration occurs when an acquisition or merger occurs. It involves buying a competing business. For example, when one mobile company merges with another mobile company.

Conglomerate integration

This refers to a combination of two companies engaged in unrelated operations. For instance, when a cloth firm and a pharmaceutical company unite.

Concentric merger

This occurs when two organizations from various but nearby industries combine. For instance, when one specialty makeup firm joins with another.

Franchising

A franchise allows a company to authorize independent business owners to sell products according to set guidelines. It offers brand recognition, low initial investment, reduced risk, and mutual support for business expansion.